Cash-strapped urban councils fear they will miss out on hundreds of millions of pounds of central government funding because next month's national census will fail to count large numbers of people.

They claim the last census missed a million people and worry that lessons were not learned, a concern rejected by the Office for National Statistics (ONS).

Gauging accurate population figures is vital for local authorities. Census statistics are used to allocate public money for local services such as education, housing, transport and health. Over £100bn a year is distributed nationally using population estimates.

A number of leading councils complain that part-time residents, people sharing a home and short-term migrants have been missed in the past. Partly to counter these concerns, the then Statistics Commission recommended in 2003 the creation of a national address register to be used for future censuses.

But this year's count, which will be held on 27 March, will be sent to addresses drawn from three lists provided by the National Land and Property Gazetteer, Ordnance Survey and Royal Mail. Councils complain they will not get to check the final list.

Westminster council claims more than 63,000 people were "lost" in the 2001 census in its borough – more than 25% of its population – resulting in a £378m shortfall over the past decade.

Helen Bray, the head of stakeholder management at the ONS, said it had built in quality assurance checks this time around and was confident it had 99% of households on its register, all of whom would be tracked to establish that they had responded.